Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP)

Introduction of a Limited Liability Partnership (LLP)

LLP or Limited Liability Partnership is an ideal collaboration of private limited company and a partnership firm. Since it was introduced, one can register for business entity of this kind and it has been following a worldwide recognition around various developed companies. LLP registration is possible for local companies, Singapore Citizens and Singapore Permanent Residents. Foreign companies and individuals should appoint a local resident manager to register for general partnership firm. With Limited Liability Partnership, the owners can flexibly operate their business as a partnership firm with enjoying the legal recognition as a private limited company. In LLP, there should be at least 2 partners and has no limit for maximum number of partners. Individuals, who are providing their professional services in the country like architects, lawyer, management advisors and accountants etc.

Advantages of a Limited Liability Partnership

Lower registration cost and easy to set up

Reduced compliance obligations – general meetings, directors, company secretary, etc., are not required

Only an annual declaration of solvency or insolvency is required

LLPs are considered as a separate legal entity from their owners, which means that owners are not responsible for any debts or losses the business incurs

Easier than Partnerships and Sole Proprietorships to secure funding for the start-up years of the business

Succession of LLPs are perpetual, until they are struck off or wound up

Disadvantages of a Limited Liability Partnership

Profits are taxed are based on the owner’s income level – this means that as the owner’s income level increases, taxes increase as well due to Singapore’s progressive tax system

Not eligible for Government funded micro loans

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